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Novartis: Leading a Global Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Novartis: Leading a Global Enterprise


Novartis, the world's leading healthcare company, was formed in 1996 out of a merger of two very different, mid-tier Switzerland-based pharma companies. The case traces the company's evolution over the past 17 years, as it transformed into a truly global enterprise with 127,000 employees of 153 nationalities in 140 countries generating $56.7 billion in 2012 revenues and $9.6 billion in net income, making the firm one of the world's largest and most profitable companies. CEO since 2010, Joe Jimenez had taken over from one of the merger's architects and visionary legacy CEO Daniel Vasella. He recognized that the global health care environment would create severe challenges for Novartis in the years ahead and that Novartis needed to make sure it had the right strategy, structure, talent and spirit to live up to its ambitions.

Authors :: William W. George, Krishna G. Palepu, Carin-Isabel Knoop

Topics :: Strategy & Execution

Tags :: Change management, Globalization, Health, Leading teams, Mergers & acquisitions, Organizational culture, Organizational structure, Talent management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Novartis: Leading a Global Enterprise" written by William W. George, Krishna G. Palepu, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Novartis 127,000 facing as an external strategic factors. Some of the topics covered in Novartis: Leading a Global Enterprise case study are - Strategic Management Strategies, Change management, Globalization, Health, Leading teams, Mergers & acquisitions, Organizational culture, Organizational structure, Talent management and Strategy & Execution.


Some of the macro environment factors that can be used to understand the Novartis: Leading a Global Enterprise casestudy better are - – talent flight as more people leaving formal jobs, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, cloud computing is disrupting traditional business models, etc



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Introduction to SWOT Analysis of Novartis: Leading a Global Enterprise


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Novartis: Leading a Global Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Novartis 127,000, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Novartis 127,000 operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.




SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix


SWOT analysis of Novartis: Leading a Global Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Novartis: Leading a Global Enterprise case study
2. Improving business portfolio management of Novartis 127,000
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Novartis 127,000




Strengths Novartis: Leading a Global Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Novartis 127,000 in Novartis: Leading a Global Enterprise Harvard Business Review case study are -

Ability to lead change in Strategy & Execution field

– Novartis 127,000 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Novartis 127,000 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Effective Research and Development (R&D)

– Novartis 127,000 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Novartis: Leading a Global Enterprise - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Novartis 127,000 has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Highly skilled collaborators

– Novartis 127,000 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Novartis: Leading a Global Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the Novartis 127,000 are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Superior customer experience

– The customer experience strategy of Novartis 127,000 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Novartis 127,000 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Novartis 127,000 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

– Suppliers of Novartis 127,000 in the sector have low bargaining power. Novartis: Leading a Global Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Novartis 127,000 to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Novartis 127,000 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Novartis 127,000 has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Strong track record of project management

– Novartis 127,000 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- Novartis 127,000 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Novartis 127,000 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Novartis: Leading a Global Enterprise Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Operational resilience

– The operational resilience strategy in the Novartis: Leading a Global Enterprise Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.






Weaknesses Novartis: Leading a Global Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Novartis: Leading a Global Enterprise are -

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Novartis: Leading a Global Enterprise, is just above the industry average. Novartis 127,000 needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

High operating costs

– Compare to the competitors, firm in the HBR case study Novartis: Leading a Global Enterprise has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Novartis 127,000 's lucrative customers.

Products dominated business model

– Even though Novartis 127,000 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Novartis: Leading a Global Enterprise should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

Novartis 127,000 has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

No frontier risks strategy

– After analyzing the HBR case study Novartis: Leading a Global Enterprise, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Slow decision making process

– As mentioned earlier in the report, Novartis 127,000 has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Novartis 127,000 even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Skills based hiring

– The stress on hiring functional specialists at Novartis 127,000 has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Novartis: Leading a Global Enterprise HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Novartis 127,000 has relatively successful track record of launching new products.

Need for greater diversity

– Novartis 127,000 has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Novartis: Leading a Global Enterprise, in the dynamic environment Novartis 127,000 has struggled to respond to the nimble upstart competition. Novartis 127,000 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Novartis 127,000 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.




Opportunities Novartis: Leading a Global Enterprise | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities highlighted in the Harvard Business Review case study Novartis: Leading a Global Enterprise are -

Manufacturing automation

– Novartis 127,000 can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Loyalty marketing

– Novartis 127,000 has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Building a culture of innovation

– managers at Novartis 127,000 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Novartis 127,000 can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Novartis 127,000 can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Buying journey improvements

– Novartis 127,000 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Novartis: Leading a Global Enterprise suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Using analytics as competitive advantage

– Novartis 127,000 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Novartis: Leading a Global Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Novartis 127,000 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Novartis 127,000 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Novartis 127,000 to hire the very best people irrespective of their geographical location.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Novartis 127,000 to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Leveraging digital technologies

– Novartis 127,000 can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Creating value in data economy

– The success of analytics program of Novartis 127,000 has opened avenues for new revenue streams for the organization in the industry. This can help Novartis 127,000 to build a more holistic ecosystem as suggested in the Novartis: Leading a Global Enterprise case study. Novartis 127,000 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Novartis 127,000 to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Novartis 127,000 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.

Low interest rates

– Even though inflation is raising its head in most developed economies, Novartis 127,000 can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.




Threats Novartis: Leading a Global Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Novartis: Leading a Global Enterprise are -

Easy access to finance

– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Novartis 127,000 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Novartis 127,000 in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Novartis 127,000 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Novartis 127,000.

Increasing wage structure of Novartis 127,000

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Novartis 127,000.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Novartis 127,000 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Novartis: Leading a Global Enterprise .

High dependence on third party suppliers

– Novartis 127,000 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Stagnating economy with rate increase

– Novartis 127,000 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Consumer confidence and its impact on Novartis 127,000 demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Novartis 127,000 in the Strategy & Execution sector and impact the bottomline of the organization.

Environmental challenges

– Novartis 127,000 needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Novartis 127,000 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Novartis: Leading a Global Enterprise, Novartis 127,000 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .




Weighted SWOT Analysis of Novartis: Leading a Global Enterprise Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Novartis: Leading a Global Enterprise needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Novartis: Leading a Global Enterprise is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Novartis: Leading a Global Enterprise is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Novartis: Leading a Global Enterprise is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Novartis 127,000 needs to make to build a sustainable competitive advantage.



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